Business

Question

Jenny's Corporation manufactured 13,000 grooming kits for horses during March. The fixed-overhead cost-allocation rate is $20 per machine-hour. The following fixed overhead data pertain to March: Actual Static Budget Production 13,000 units 12,000 units Machine-hours 3,050 hours 3,000 hours Fixed overhead costs $63,000 $60,000 What is the fixed overhead spending variance

1 Answer

  • Answer:

    $3,000 unfavorable

    Explanation:

    With regards to the above, the fixed overhead spending variance is computed as;

    = Actual overhead - Budgeted overhead.

    Given that;

    Actual overhead =

    Budgeted overhead =

    = $63,000 - $60,000

    = $3,000 unfavorable

    Therefore, the fixed overhead spending variance is $3,000 unfavorable

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